MILWAUKEE, WI – Chicago based Tricap Residential Group,an owner and operator of multifamily communities, has closed on the acquisition of Franklin Park Apartments for a buy price of $6,550,000. This transaction will add another 128 apartments to Tricap’s existing portfolio and is their first acquisition in Wisconsin. Tricap now owns and operates apartment communities in five states.

The property will be rebranded as one of Tricap’s Haven communities. Tricap will do a value-add strategy including significant unit renovations, modernization of the common areas, and professional management practices that will maximize rents at the property.

“We are thrilled about this opportunity as this acquisition allows us to continue our execution expertise on another well-located, well maintained suburban asset,” said Bryan Pritchard, President/CEO of Tricap.  “The continuing trend of renting versus owning has spread to suburban submarkets, and our renovated apartment communities allow us to offer a very high-quality product at an affordable price.  Combined with our focus on exceptional service, we believe we have the best value proposition for renters in the marketplace.”

The investment is co-sponsored with The Wolcott Group, the fourth deal the two firms have partnered on.  The acquisition was financed with a loan assumption of an existing Freddie Mac mortgage originated by Justin Nelson of Walker & Dunlop.

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DALLAS, TX – After posting significant gains in 2018, the U.S. multifamily market is expected to show continued strength this year, amid swelling demand among younger adults for rental units and investor optimism in this market sector, according to BBG, a leading commercial real estate due diligence firm.

Last year, the multifamily market saw dramatic growth, with a 15% jump in apartment transactions totaling nearly $168 billion, an industry report said. This year, an estimated 280,000 multifamily units will be completed, slightly down from 290,300 units in 2018, though it still reflects a healthy market.

One of the largest factors fueling this demand is more young adults residing in multifamily properties. This has been attributed to various reasons, including high debt levels incurred among this age group, the desire to be mobile and flexible, the lack of affordable single-family home ownership options — particularly in metropolitan areas — and a preference to live in or close to urban cores.

Rents for multifamily housing have been steadily rising due to the increased demand.

The average asking rent for multifamily units across the country rose nearly 5% in 2018, or $1,441 per unit, from the end of 2017, according to one research report, adding that the fourth quarter of 2018 was the 36th consecutive quarter of growth in rental rates.

While the vacancy rate for multifamily units ticked up slightly to 4.8% in the first quarter of 2019 from 4.7% at beginning of 2018, the report said, the rate was still significantly below 8% posted a decade ago.

Existing multifamily properties have increased in value as it is more expensive to build more product as a result of rising new construction costs, including labor, materials and equipment. Value add properties are in high demand where moderate to significant renovations can increase rents significantly.

New trends in multifamily living have emerged during this period of growth, such as vacant department stores being repurposed for apartment rentals and the proliferation of co-living buildings in major cities. New amenities and finishes are being added in all classes of properties, including added attention to pet amenities, common areas that encourage connectivity, and various parking features including electric charging stations, bicycle storage, motorcycle parking, and shared car services located on-site.

Mary Ann Barnett, MAI, BBG Multifamily Practice Leader and Managing Director, commented: “In 2018, multifamily housing had a banner year as a result of a robust economy, a continuing trend of a younger generation continuing to migrate to urban areas and increased investor demand for this asset class. We anticipate that multifamily will remain stable in 2019 as underlying market fundamentals continue to support this market.”

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SEATTLE, WA – Apartnership between Security Properties and Rockwood Capital bought Taluswood, a 512-unit multifamily property located in Mountlake Terrace, WA. The property was originally built in 1987 and sits on over 41 acres of land.

Taluswood’s unique central location allows residents the benefit of convenient regional job access in multiple directions. To the east is the heart of the East side’s High-Tech Corridor, containing some of the area’s largest employers like Microsoft and Google. Just 25 minutes north of Taluswood sits Boeing’s 100 acre, 472 million cubic feet assembly plant and more than 38,000 employees. Bothell, also east of Taluswood, is a business hub featuring notable employers such as Blue Heron Biotechnology, AT&T, Lockheed Martin, and Seattle Genetics. Further, being just 25 minutes north of Seattle, the list of employers expands to include Amazon, Facebook, University of Washington, Tableau, and Providence Health. 

This accessibility will be further enhanced when Sound Transit’s Link Light Rail extends its service north to the intersection of 236th Street SW and Interstate 5 (approximately 1 mile west of the property), currently scheduled to open in 2024.

Within 10 minutes of Taluswood, residents are exposed to multiple major shopping centers, including the Alderwood Mall, the Northgate Mall and the Park Hills shopping center. These major shopping centers include a variety of dining and retail options, including Nordstrom, REI, Apple, Target, Macy’s, Panera, and Starbucks. Other nearby amenities include the Terrace Creek Park (60-acres) and Ballinger Park (55-acres), both within a 5-minute drive.

The partnership between Security Properties and Rockwood plans to renovate the unit interiors, update the common areas and paint the exteriors.  According to Davis Vaughn, Senior Director at Security Properties, the acquisition was made because, “[a]s one of the first garden-style assets of scale heading north from Seattle, Taluswood is well-positioned for those looking for relief from Seattle pricing.  With convenient job access to Everett, Seattle and the Eastside, walkable light rail coming, and a low-density setting that will never be replicated, Taluswood offers an brilliant value proposition for renters that will only be enhanced by the plotted renovation.”

“Rockwood Capital firmly believes that the Puget Sound is one of the most vibrant markets in the nation, and we are excited to buy Taluswood given its hard-to-reproduce, low-density nature that will appeal to a broad range of renters,” said Matthew Friedman, a Director of Rockwood Capital. “We feel the asset is ideally positioned for a meaningful value-add program that will make a unique offering in the market.”

The property will be managed by Security Properties Residential, an affiliate of Security Properties.

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